FTC Report Investigates Mobile Apps for Kids

By Samuel Castic

Federal Trade Commission staff recently released a report titled “Mobile Apps for Kids: Disclosures Still Not Making the Grade,” which contained the FTC’s most recent mobile app investigative findings that build upon its report from February of this year. The February report contained four key recommendations, which we summarized in a prior post.

This new report expanded on the FTC’s prior investigation by reviewing mobile app features and comparing them to disclosures made concerning the apps. The FTC found that many apps shared kids’ information with third parties without disclosing such practices to parents. Specifically:

1.      Most apps failed to disclose information collection or sharing practices before the apps were downloaded;

2.      Many apps failed to disclose that they contained advertising content or that the app shared privacy data with third-party advertising networks (including device IDs, geolocation information, and phone numbers);

3.      Some apps failed to disclose that they allowed in-app purchases;

4.      Some apps failed to disclose that they contained social media integrations that allow users to communicate with members of social networks; and

5.      Some app disclosures included false information. For example, certain apps expressly stated that user information would not be shared or that the apps did not contain advertising, when that was not the case.

The FTC has taken the position that mobile apps are online services for purposes of the Children’s Online Privacy Protection Act (“COPPA”), which prohibits the online collection of personal information concerning children under age 13, except in certain circumstances. As we have noted in prior posts, this area is fraught with risk and legal exposure. Indeed, the report indicates that the FTC staff plans to launch “multiple nonpublic investigations” to determine whether certain players in the mobile app space have violated COPPA or engaged in unfair acts or deceptive practices in violation of the FTC Act.

The report concludes by urging the mobile app industry to carry out the recommendations from the FTC’s recent privacy report—most notably, to:

1.      Incorporate privacy protections into the design of mobile products and services;

2.      Offer parents easy-to-understand choices about data collection and sharing through kids’ apps; and

3.      Provide greater transparency about how data is collected, used, and shared through kids’ apps.

Stay tuned in the upcoming weeks as the FTC is expected to announce new COPPA regulations that could impose further compliance challenges for mobile apps.

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